The High Court has refused permission for two property developers to amend their initial agreed cost budget of approximately £1.5 million after an attempt to request almost double the sums allowed.
What is a cost budget?
A cost budget is a document that gives an estimate of the proportionate and reasonable costs that in your litigation matter you have incurred and intend to incur. The costs budget should also include all assumptions as an estimate and state any contingency events that might occur e.g. mediation or any likely applications.
Claimants’ application to amend cost budget
Persimmon Homes Ltd & Anor v Osborne Clark LLP concerned a £10 million professional negligence claim commenced by Persimmon Homes and Taylor Wimpey Homes UK against Osborne Clarke. The commercial property developers applied to amend their cost budget.
Earlier in the case, the Court had approved the developers’ costs budget of £1,455,000, which included just over £1 million of estimated costs. The developers subsequently sought to increase their budget to £2.8 million arguing that it had not been anticipated that Osborne Clarke would have made a request for disclosure.
Master Kaye emphasised that not every development justifies a revision on the initial approved cost budget even if cost consequences are involved through the duration of the development. In considering the actual significance of the development, which would deliberate the need for a revised budget, the Court determined that no real significance was made and as a result dismissed the developers’ application. Master Kaye held that the development for the disclosure request should have been preempted without needing a revision.
When should I file a cost budget?
Unless otherwise directed, parties are required to file their Costs Budgets not later than 21 days before the first Case Management Conference (CMC) (CPR 3.13 (i)(a)).
The importance of filing a cost budget
A party who fails to file a budget will, unless the Court otherwise orders, be treated as having filed a budget only comprising of the applicable Court fees (CPR 3.14).
This means that, even if it is successful in the litigation, that party will be unable to recover the costs of its lawyers, experts and other costs incurred.
My solicitor failed to serve a cost budget
Failure to file and serve a costs budget can result in the loss of ability to recover costs. Where clients suffer a loss as a result of a solicitor’s error, then there are grounds for a professional negligence claim against the lawyer.
Our professional negligence team have expertise in advising on claims for compensation against professionals that have fallen below the standard expected, which causes clients financial or personal loss.
Instructing our Litigation Lawyers
We ensure that we provide the best possible outcome for our clients by conducting in depth investigation and research into the realistic prospects of a case before selecting the appropriate course of action in order to reduce time and expense. Liability for costs is always an issue in litigation and based on our extensive litigation experience we provide our clients with as much strategic, practical as well as carefully considered legal advice in order to ensure minimum risk in respect of costs. Where appropriate we encourage the use of alternative dispute resolution (such as mediation and without prejudice negotiation) and our lawyer’s negotiation skills are first class. If early settlement at advantageous terms is not possible, we are extremely experienced and capable at navigating our clients through the litigation process.
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